Same Sex Couple Planning for Floridians
The Skinny on SCINs
Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 5 of a 7 Part Series
Phil Rarick’s Informative Client Blog Entries: Standby Elective Share Trusts
Thursday Report Jokes
We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.
This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.
Why Same Sex Couples Will Be Moving to Florida
By Alan S. Gassman, J.D., LL.M. and Nathan West, J.D., LL.M.
Before the IRS issued Revenue Ruling 2013-17 last Thursday, a same sex couple would not receive full married couple benefits under the estate and gift tax laws unless they were (1) married in a state that recognizes same sex marriages and (2) resided in a state that also recognizes same sex marriages.
The above interpretation is consistent with the Supreme Court’s decision in the United States v. Windsor case as discussed in our Leimberg Newsletter #2123, which was entitled Many Affluent Same-Sex Couples Will Be Leaving Florida and Where They Should Go. This piece was premised upon the court’s decision to the effect that a same-sex couple would not be considered as married for tax purposes if the state where they resided did not recognize the marriage. That changed very quickly!
On Thursday, August 29, 2013, the IRS took a very big step forward in ruling that same sex couples will be considered as married for federal income, estate and gift tax purposes. Any same sex marriage legally entered into in one of the 13 states that allow same sex marriages, click here to see the chart, the District of Columbia, or a foreign jurisdiction having legal authority to sanction same sex marriages is covered under this ruling; notwithstanding whether the spouses live in a state or other jurisdiction that recognizes their marriage legally.
The rules and implication thereof were very thoroughly explained by George Karibjanian in Steve Leimberg’s Estate Planning Email Newsletter Archive Message #3137 that was published on September 3rd and can be viewed by clicking here.
As the result of this, affluent married couples can move to Florida to avoid state inheritance taxes, state estate taxes, and state income taxes, because Florida has none of these taxes and is also a pretty darned neat place to live (when it is not 100 degrees outside with 100% humidity and the power is not working because of a lightning storm).
In addition to the above, same sex couples can bring their guns to Florida and use them almost any time they want, as described in our “Are We the Gunshine State? Justifiable Use of Force in Florida in Chapter 776 – Or Did They Mean Section 1776?” article that begins in next week’s issue of the Thursday Report.
Revenue Ruling 2013-17 provides that Internal Revenue Code Section 6511 gives same sex married couples the option of amending their prior tax returns, going back 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Same sex couples may also choose to leave the prior returns in tact or to amend one or more prior tax years.
This gives same sex couples some very good choices for income tax planning purposes. Almost all affluent same sex couples (or couples where one spouse is affluent) will want to go to a good income tax advisor with the right software to help determine what years they should amend and what years they should not amend.
Any gift tax return that involved a transfer to a spouse that used up any portion of the donor spouse’s estate tax exemption should probably be amended to regain the exemption amount, unless there are other items on the gift tax return that are best not re-opened, such as large gifts with questionable values to non-spouse individuals.
Amending a gift tax return will give the IRS three years after the date of the amendment to revisit all aspects of the gift tax return amended.
Same sex couples who are not formally married in one of the recognition states should consider whether the estate and gift tax and income tax advantages of getting married outweigh potential disadvantages. These disadvantages can include;
- having to leave qualified plan benefits to a surviving spouse who will not sign a waiver associated therewith,
- having alimony and property settlement right vest in a new spouse if the new spouse will not sign a binding prenuptial agreement as requested by the other spouse,
- having to have the new spouse on the healthcare plan of an employed spouse whose employer requires this,
- having to inform an employer that a same sex marriage exists in order to comply with personnel, office and associated requirements (which may occur in states that do not prevent discrimination against homosexual individuals, such as Florida, however many cities and counties in Florida have enacted ordinances prohibiting sexual orientation discrimination in the workplace),
- having to decide who to invite to the ceremony and who is going to pay for it or,
- whether to go to Justice Ginsberg’s house since she will probably not charge because it would have to be disclosed on her income disclosure form.
Advisors who represent one or more members of an affluent same sex couple will need to reach out to let them know that if and when they are married they can have a new estate tax plan that includes marital deduction planning, QTIP trust planning, and associated rights and responsibilities.
When the couple resides in Florida it is probably also useful to have them consider a prenuptial agreement, even though Florida law will not give either spouse “marital rights or responsibilities” in the event of a divorce at the present time. This could change in the not too distant future, and if so alimony and property settlement rights might date back to when the couple was originally married, as opposed to dating back to when the Florida legislature and a future governor might sign such legislation into existence.
Also consider some advantages vs. disadvantages of marriage shown below.
Advantages of Marriage
Disadvantages of Marriage
The Skinny on SCINs – IRS PUTS SCINS IN THE SUNLIGHT. WILL TAXPAYERS GET BURNED?
By Alan S. Gassman, J.D., LL.M. and Kenneth J. Crotty, J.D., LL.M.
Chief Counsel Advice (CCA) 201330033 was issued recently in what came as a surprise and disappointment to a great many planners and commentators. In this pronouncement the IRS Chief Counsel’s Office rejected the traditional practice of using the § 7520 mortality tables to value a self-cancelling installment note (SCIN) where the note holder had a better than 50% chance of living longer than one year. Instead, the office announced that in their view the valuation of a SCIN would have to take into account a manual review of what a willing buyer would pay a willing seller, after assessing the note holder’s specific life expectancy based on the note holder’s medical history and such other factors as arm’s-length parties would consider under Treas. Reg. §25.2512-8. Departing from the established system of using actuarial tables would lead to uncertainty as to how to properly value a SCIN, as well as dramatically increasing litigation. Hopefully the IRS will read its own regulations and recall this seemingly erroneous pronouncement. As Howard Zaritsky and others have pointed out, § 7520 states that it must be used to value “an interest for life or a term of years,” which precisely describes the payments scheduled to be made under a SCIN. Before this CCA was issued, the IRS had never indicated to the contrary after decades of literature and many cases have been decided. To change the way of looking at this now would be inappropriate, to say the least. Others have called for use of the § 7820 tables, which are even more taxpayer friendly than the § 7520 tables, as discussed below.
The case addressed in the CCA memo involved five separate transfers that a decedent entered into in the final year of his life. While all personal information had been redacted from the CCA, subsequent reports have indicated that the case involved William M. Davidson, a successful businessman and most notably the owner of the Detroit Pistons NBA basketball team. The stakes here are very large. According to Mitchell Gans and Jonathan Blattmachr in LISI Estate Planning Newsletter #2135, the proposed deficiency claimed by the IRS could reach close to one billion dollars. Specifically at issue were two transfers of closely held stock to grantor trusts in exchange for SCINs. Shortly after these transactions were made, the decedent was diagnosed with a health issue. He died within six months of this diagnosis.
One of the main issues of the CCA—and the focus of this article, was how the fair market value of the SCINs should be determined. The notes had been valued based on § 7520 mortality tables. The Chief Counsel’s Office determined that the § 7520 tables should not be used to value the notes in this situation, explaining that “[b]y its terms, § 7520 applies only to value an annuity, any interest for life or term of years, or any remainder.” Without any further explanation, the memo hastily cites to General Counsel Memorandum 39503 concluding that the notes should be valued based on a method that takes into account the willing-buyer willing-seller standard.
A SCIN differs from a regular installment note in that the remaining balance owed is cancelled on the death of the obligee. Thus, the noteholder can receive higher payments during his or her lifetime in exchange for there being no payments after his or her death. SCINs are frequently used in intra-family transfers of property, and on many occasions will cause avoidance of estate taxes. These transactions are of course most beneficial when the seller dies before his or her actuarial life expectancy, but in many situations the noteholder will live longer than his or her life expectancy and receive back payments that exceed what he or she would have otherwise received. If a noteholder dies before the note’s term, the self-cancelling provision cancels the remaining balance on the note, and the entire value is transferred to the buyer without any transfer taxes. Thus, the ideal candidate is said to be “someone in poor health, but whose death is not imminent, or someone with a very poor family health history.” Commentators will often refer to this as a “bet-to-die” technique because the sooner that the seller dies after the sale the greater the beneficial estate tax consequences will be. Because the note may never be repaid, a risk premium is added to either the interest rate, principal amount, or both, and the note must be set to be paid in full or scheduled to balloon before the life expectancy of the note holder, as of the date that the note is made.
Howard Zaritsky explains the importance of the premium that is derived from the IRC § 7520 tables:
All of the cases upholding SCINs stress that the self-canceling feature was a bargained-for consideration between the parties and that the buyers paid a distinct premium for that features. This is a critical feature for transfer tax purposes. The failure to pay a premium for a self-canceling feature in a SCIN strongly suggests that the transaction is, at least in part, a gift with a retained life estate includable in the decedent’s gross estate under Section 2036(a).
In the past, the IRS has acquiesced in court decisions upholding the cancellation provision as part of the bargained-for consideration, and to some extent, have even recognized the principle. As long as the transaction is bona fide, a SCIN sale should not be subject to a gift tax. To be bona fide, a reasonable expectation of repayment should exist along with an established payment schedule. In cases where no evidence of repayment exists, the court has upheld IRS challenges.
The issue at the heart the of the CCA turns on how SCINs are classified and the applicable valuation method to apply. Traditionally, practitioners use § 7520 to value SCINs. In fact, much of the basic software used to value SCINs is based on the § 7520 rate. Practitioners Robert Held and Charles Newlin support this approach explaining that “[w]hile Section 7520, by its terms, applies only to the value of an annuity, term interest, remainder or reversion, there seems little reason (beyond semantics) not to apply its rationale and consistency to the SCIN.” Additionally, Howard Zaritsky has advocated for the application of § 7520 rates. Zaritsky states:
Section 7520 states that it must be used to value ‘an interest for life or a term of years,’ which precisely describes the payments under a SCIN. Furthermore, the IRS publication ‘Actuarial Values, Alpha Volume,’ which implements the IRS actuarial tables under Section 7520, includes an example that uses the tables to determine ‘the present worth of a temporary annuity of $1.00 per annum payable annually for 10 years or until the prior death of a person aged 65….’ This, too, appears to describe precisely the calculation of the premium for a SCIN. Thus, Section 7520 appears to apply by its terms to the valuation of a SCIN premium.
Treasury Reg. § 20.7520-3 places restrictions on the use of § 7520. Of particular interest in the SCIN context, the section sets forth a twelve-month rule for a person that is terminally ill:
the mortality component prescribed under Section 7520 may not be used to determine the present value of an annuity, income interest, remainder interest, or reversionary interest if an individual who is a measuring life is terminally ill at the time of the decedent’s death. For purposes of this paragraph (b)(3), an individual who is known to have an incurable illness or other deteriorating physical condition is considered terminally ill if there is at least a 50 percent probability that the individual will die within 1 year.
The section then goes on to establish an eighteen-month rebuttable presumption, often referred to as the safe-harbor provision:
[i]f the individual survives for eighteen months or longer after the [effective date of the note], that individual shall be presumed to have not been terminally ill at the date of death unless the contrary is established by clear and convincing evidence.
Therefore in situations where the noteholder has survived the sale by eighteen months or longer, the IRS may still challenge the use of the § 7520 mortality tables but would have the tougher burden of establishing by clear and convincing evidence that these tables should not apply. The practical consequences of the terminal illness restrictions on SCIN holders means that they should first get a doctor’s letter. To be safe, the letter could state that there is more than a 50% chance that the holder will be alive on the maturity date of the note.
However, not every commentator agrees with using § 7520 valuation, and it seems that more recently, what rate to apply has been a point of contention for some commentators. The problem is that § 7520 rules explicitly apply to annuities, life estates, remainders, and term interests and estate planners have differing views on how SCINs fit into this spectrum. According to Steve Akers and Philip Hayes from the 2013 Heckerling Institute on Estate Planning:
[t]here is not universal agreement on how payments under a SCIN are properly valued, for there is no clear answer concerning which mortality tables should be used and which discount rate should be applied to value these payments Some commentators use the life expectancies in Table 90 CM for May 1999-April 2009 and Table 2000CM from May 2009 forward and a rate equal to the greater of 120% of the mid-term AFR, assuming annual payments, as prescribed by Section 7520, or the AFR for the actual term of the note, as prescribed by Section 7872. Others use the annuity tables under Section 72 and the AFR as prescribed by 7872. Additionally, some commentators have recommended that the actual life expectancy be used.
Elliott Manning and Jerome Hesch argue that for a SCIN taxable as an installment sale, the AFR prescribed in §§ 1274 and 7872 should apply—not the § 7520 rate. They base this argument on the idea that a SCIN is not a term interest under § 7520, stating that the “same considerations that lead to the conclusion that an installment note is not a retained life estate also lead to the conclusion that it is not a term interest.” Manning and Hesch explain that their argument is consistent with “(i) the analysis in Reg. § 1.1275-1(j) that a SCIN is treated as a debt obligation subject to the OID rules, including the provisions of § 1274, and (ii) the similar conclusion in G.C.M. 39503 for a SCIN with a maximum term less than the seller’s life expectancy is treated under the installment sale rules of § 453.” They also claim that the Tax Court’s decision in Frazee v. Commissioner, employing § 7872 to determine the interest rate for the value of a note for both income tax purposes and gift tax purposes, further supports their position.
Manning and Hesch further suggest that the unintended gift issue should be eliminated. They explain:
[t]reating all SCINs and private annuity sales as installment sales means that the AFR determines the discount rate. If the same valuation principles are used for both income and transfer tax purposes, valuation disparities for the same transaction can be avoided. Therefore, § 7520 does not apply. Consequently, the unintended gift problem and other distortions can be avoided.
The best answer may be case-specific. Akers and Hayes suggest:
AFRs should not be used by the faint of heart. A conservative planner probably should use the higher of the § 7520 rate or the AFR for the actual term of the note, as recommended by Covey. Clearly, many if not most, practitioners are using the higher of the § 7520 rate or the AFR for the actual term of the note; the estate tax risk of using a rate that is too low is simply too great.
Despite these differences of opinion over what actuarial tables to apply, the IRS flat out rejects the use of any of these practices in this latest CCA memo and uses a new approach: the “method that takes into account the willing-buyer willing-seller standard in Treas. Reg. 25.2512-8” which is the method typically applied to gift taxes. The IRS further states that the medical history of the decedent should be considered. The IRS fails to provide further guidance as to how to apply the valuation standard, which would make the process very subjective, to say the least. Some have speculated that a combination of actuarial, medical, and investment risk factors would need to be considered–a process that would undoubtedly be more difficult and imprecise than relying on § 7520 tables. With no certainty in procedures and what seems like a greater potential for challenge, the IRS is stripping away the biggest advantage of establishing a SCIN in the first place which is that there should be no gift tax consequence.
A well-known authority in the area has criticized the CCA memo, stating that it should not be given much credence and that the IRS is simply trying to take the best position that it can in light of the Davidson case. The CCA appears to assume that the payment was supposed to be within the decedent’s actuarial life expectancy, but we are not provided his actuarial life expectancy at the time of the transaction. Although it might seem odd that the health issue suddenly came to light not long after the transaction, no information is provided as to the decedent’s health at the time of the transaction.
After acquiescing for years to the use of the § 7520 tables, the IRS suddenly seems to want to no longer use these tables to value a SCIN. The CCA provides a quick cite to General Counsel Memorandum (GCM) 39503 for this proposition–a non-binding memo issued by the IRS in 1986. This Memorandum stated as follows:
Under an installment sale, a gift tax will not be imposed if the sale price and length of payment are reasonable in light of the facts and circumstances of the case. The value of the installment obligation and the property sold must be substantially equal. However, unlike the private annuity, there is no requirement that the actuarial tables are to be used in determining the gift taxation of an installment sale. Thus, the taxpayer’s particular health status may be considered, and there is more room to establish that the terms of the sale are reasonable (emphasis added).
As the language clearly shows, the GCM is not rejecting the use of the mortality tables at all. The memo simply acknowledged that Revenue Ruling 80-80 required taxpayers to use the mortality tables in Treasury Regulation § 20.2031-10 to value private annuities, and reiterated that no such requirement existed for SCINS. The fact that the use of the § 7520 tables is not required, does not mean that these tables do not offer the most practical valuation system for SCINs as well. And again, this memo was released in 1986. The subsequent Rev. Rul. 96-3 deemed Rev. Rul. 80-80 to be obsolete. Yet the CCA characterizes the GCM for the proposition that mortality tables should not be used and the willing-buyer willing-seller standard should be used instead. Simply put, the CCA mischaracterizes the GCM for standing for a much broader principle than it actually does. The 2013 Tax Management Estates, Gifts, and Trusts Portfolios, Edward Wojnaroski reflects on the 1986 GCM Memo:
While GCM 39503 may give planners substantially more flexibility in structuring SCIN Transactions, the reasonableness of the SCINs terms relative to a private annuity involve a subjective interpretation. In addition to evaluating the seller’s health, it is crucial to obtain a realistic value for the property being transferred. To the extent that the property sold is difficult to value, this will compound the probabilities of scrutiny by the IRS.
And despite the fact that this GCM was released over twenty-five years ago, we have not seen significant changes in the valuation process from the IRS–until now. With no real precedent to resort to, the issue really seems to come down to semantics. By changing the valuation of a SCIN, the IRS is abandoning a mechanical valuation system for a system that practitioners can only speculate about. Although Hesch and Manning have cited to the GCM memo previously, they have still advocated the use of § 7282 tables, which at least provide clarity. Prior to the release of the CCA, Wojnaroski also recommended using the tables in Tax Management Estates, Gifts, and Trusts Portfolios, arguing that the IRS should have greater respect for the use of the tables:
The risk premium for a SCIN does not have to be obtained by reference to the actuarial tables. The planner or client may engage an actuary for this purpose. However, it would appear that relying on the tables provides a greater degree of certainty that the IRS will respect the terms of a SCIN if the assumption about the seller’s life expectancy are reasonable and reflect recent mortality data. If the taxpayer chooses to set the terms of a SCIN by looking outside of the tables, it is advisable to consider the amount of the down payment being made, the length of the contract, and the seller’s actual health (assuming the measuring life used is the seller’s). The IRS has indicated it will not require the value of the consideration paid for the property being transferred pursuant to a SCIN to be identical, but the consideration and transferred property must be substantially equal. The subjective valuation of a SCIN makes the job of satisfying this “substantially equal” test a difficult and perhaps expensive hurdle for the taxpayer with respect to intra-family transactions if the seller’s life expectancy is substantially less than what his or her life expectancy would be under standard actuarial tables. It would appear that there may be a greater risk of a gift tax when working with a SCIN than there would be with a private annuity.
Regardless of how the face value of the SCIN is determined, the only winner is likely to be the IRS, while practitioners are left uncertain on the use of the SCIN, and clients are forced to litigate the potential gift tax trend.
Is the CCA memo binding? The IRS explains that CCA memos “are legal advice, signed by executives in the National Office of the Office of Chief Counsel and issued to Internal Revenue Service personnel who are national program executives and managers. They are issued to assist Service personnel in administering their programs by providing authoritative legal opinions on certain matters, such as industry-wide issues.” But most importantly, the IRS states that “these documents cannot be used or cited as precedent.” While the memo might not be binding, it does appear that the IRS is suggesting that the willing-buyer, willing-seller standard should apply to every SCIN. And these memos frequently serve as announcements of the litigation position that the IRS will take. Based on the memo, caution might suggest that a client get additional appraisals beyond that of the underlying assets to include an appraisal of the actual note, as well as a determination of a reasonable interest rate that should be used. The CCA seems to indicate that when the SCIN holder dies before the end of the term, the estate better prepare for litigation. As one authority put it, clients need to “have an appraiser bless the rate, and then the Service has to have their appraiser tell you why it’s wrong.” This prospect may make many estate planners opt for an alternative, safer technique such as a private annuity.
Going forward, estate planners can look forward to seeing whether the IRS provides clarification on its expectations for the valuation process, takes a stronger stance toward the willing-buyer willing-seller standard, or allows the working system to remain intact. In the meantime, private annuities will be more popular and more widely used by planners who do not want to cross the line in the sand that may be moved by waves, tides, and sand kicking bullies in years to come.
Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 5 of a 7 Part Series
This week we cover the important topics of how much disclosure is enough disclosure, whether both parties need to have lawyers, and questions to ask the lawyer or spouse you are not representing to document appropriate disclosure and circumstances by video taped interview or written correspondence.
- Part 1 presented on Thursday, August 8, 2013, the reader was introduced to the present overall status of prenuptial agreement statutory law and case law, and talks about prominent malpractice traps and how to get clients prepared for what they can encounter in the prenuptial agreement universe. Click here to be directed to the Thursday Report for August 8, 2013.
- Part 2 on Thursday, August 15, 2013, discussed the important topics of how much disclosure is enough disclosure and whether or not both parties need to have lawyers. Click here to be directed to the Thursday Report for August 15, 2013.
- Part 3, on Thursday, August 22, 2013, Questions to ask the lawyer or spouse you are not representing to document appropriate disclosure circumstances by video-taped interview or written correspondence. Click here to be directed to the Thursday Report for August 22, 2013.
- Part 4 on Thursday, August 29, 2013, discussed Castro v. Castro and Belcher v. Belcher, and what they mean for clients and lawyers who are involved in the pre and post nuptial agreement planning. Click here to be directed to the Thursday Report for August 29, 2013.
- Part 5, Today, September 5, 2013, Today we have a discussion of alimony and lawyer fee obligations that may not be waivable in pre-nuptial or post nuptial agreements, and offset clauses and other ways to handle these.
- Part 6, On Thursday, September 12, 2013, Bifurcation – whether you can require the validity of the pre-nuptial or post-nuptial agreement be litigated or also before having to also litigate what the result could be if it is or is not enforceable.
- Part 7, On Thursday, September 19, 2013, How to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.
Our fifth part of the interview will cover temporary alimony and lawyer fee obligations that may not be waiveable in a pre-nuptial or post-nuptial agreement, and offset clauses and other ways to handle these.
Alan Gassman: Well for the tax lawyers who are listening here, and we don’t know much about this, how long would you expect to pay temporary alimony in the pendency of one of these types of actions? So this would be a reason for the less monied spouse to object to the enforceability of the agreement so that there could be a long time for him or her to receive temporary support?
Judge Jirotka: That’s correct. I am going to take a guess. I don’t have the exact figures in front of me, but in general a dissolution of marriage case in Pinellas County runs very short or very long. There’s really no way you can tell. If there are no assets and it’s what’s called a simple or simplified dissolution of marriage, that can go very quickly. In fact, those are even handled in county court as opposed to circuit court. Once you get into lengthy arguments as to assets, which of course is why you’d have this prenup agreement, it can go on for a number of years. Ky has that been your experience?
Ky Koch: Absolutely, you know I don’t want to generalize Alan, but I would think 8 to 12 months is probably an average. You would see some that go quicker. You’d see some that go longer. A case that Judge Jirotka and I are both intimately familiar with ran for five years and cost approximately $500,000 in lawyer and expert fees during that five years, in addition to having the husband be required to pay a significant amount of temporary support.
Judge Jirotka: Cases also can have appeals going on at the same time, or certain aspects of the case will grind to a halt at the trial level while a particular issue is appealed.
Ky Koch: You know Alan, another subject the Judge and I should talk about today is in my opinion, a lot of us are missing out on something that’s very important to consider in these prenuptial agreement drafting issues and that is this isn’t just a divorce lawyer issue. It’s not just an estate planning lawyer issue. I think the two disciplines have got to merge and deal together on drafting an appropriate agreement for people going through these prenuptials.
Alan Gassman: I agree with that. That’s a great point.
Ky Koch: There are so many death implications in a divorce. I won’t deal with it because I don’t know how to, but I feel like it’s a must for those two disciplines to come together in drafting a prenup because there are so many ramifications that go both directions.
Alan Gassman: Yeah that’s a very good point.
Ky Koch: You all don’t know what goes on in the courtroom in a divorce. We don’t know what goes on in the estate planning side of it and both of them are severely impacted, dramatically impacted by every prenup. I think it’s nearing mistake if you don’t engage both lawyers, estate planning and divorce, to become involved in a prenuptial agreement.
Alan Gassman: That makes good sense – absolutely. Of course, then you deal with the clients saying I need two lawyers. It’s going to cost more than $600 now.
Ky Koch: And that’s a whole other problem because most people come into your office and say you know look at that computer there. Can you push the prenuptial button and just put my name and my spouse’s name there? Then we’ll be in tomorrow morning to sign it. That is a misconception. It’s difficult for me to convey to a client because they’re sitting there looking at you thinking gee, you’re just talking up fees here. In fact, these things are not cheap.
Phil Rarick’s Informative Client Blog Entries: Standby Elective Share Trusts
Our friend Phil Rarick of Rarick, Beskin & Garcia Vega, P.A. in Miami has been kind enough to allow us to provide one of his excellent client communications articles each week until you have read all of them.
Phil has 30 years of experience in both private and public legal work. He is a past President of the Miami Lakes Bar Association and formerly counsel to the National Association of Attorneys General.
This week’s topic is Standby Elective Share Trusts.
Florida’s elective share statute allows attorneys to draft standby elective share trusts. (For a summary of Florida’s elective share see the post: Florida’s Sweeping Elective Share.) Trusts that create property interests contingent upon an election being made are qualified to fund the spouse’s elective share interests.
Thursday Report Jokes
An important conversation between Colonel Sanders and Professor Jerry Hesch:
I would tell another Chemistry joke, but all the good ones Argon
What do you call an alligator in a vest?
– An investigator
Did you hear about the hungry clock?
– It went back four seconds
What do you call a dinosaur with an extensive vocabulary?
– A thesaurus
Where did the computer go to dance?
– To a disc-o
What did the keyboard say to the other keyboard?
-You’re not my type.
Applicable Federal Rates
Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.
SEMINARS AND WEBINARS
AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!
Date: Tuesday, September 10, 2013 | 5:00 p.m. and Thursday, September 12, 2013 | 12:30 p.m. (Each webinar will last 30 minutes)
Presenter: Sandra Greenblatt, Board Certified Health Lawyer
Location: Online webinar.
BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN
Date: Monday, September 16, 2013 | 6:00 p.m.
Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater
Additional Information: Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served. To register for the event please click here.
NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY
Date: Wednesday, September 18, 2013
Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA, PhD, SOB
Location: Online webinar
Additional Information: To register for the webinar please click here.
NORTH SUNCOAST FICPA MONTHLY MEETING
Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.
Speakers: Alan Gassman and Christopher Denicolo will speak on The Florida CPA’s Guide to Planning with Physicians and Medical Practices
Location: Chili’s in Port Richey
Additional Information: To attend this seminar please email email@example.com
WEDU ESTATE PLANNING SEMINAR
Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?
Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS
Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am
Location: WEDU PBS Berman Family Broadcast Center
Additional Information: If you would like to sign up for this seminar please click here.
THE 444 SHOW – STAND YOUR GROUND LAWS
Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)
Location: Online webinar.
Presenters: Kym Rivellini and Denis deVlaming
Additional Information: This webinar qualifies for 1 hour of continuing education credit and costs $30.00. To register please visit www.clearwaterbar.org
LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS
Date: Monday, October 7, 2013 | 12:30 p.m.
Location: Online webinar
Presenter: John Graden
Additional Information:To register please visit www.clearwaterbar.org
MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO
Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6pm in the evening. We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.
DATE: Wednesday, October 9, 2013
Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida
Additional Information: To register for the event please click here.
PLANNED GIVING CONSORTIUM LUNCHEON
Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER
Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.
Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey
Additional Information: For more information or to attend this event please email firstname.lastname@example.org
INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO
On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.
Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.
Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida
Additional Information: To register for the event please click here.
NOTRE DAME TAX INSTITUTE
Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES
Date: Wednesday, October 16 through Friday, October 18, 2013
Location: Notre Dame College, South Bend, Indiana
Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts. Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.
We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.
PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR
Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.
Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.
Barry Flagg will speak on insurance and estate planning.
Sean Casey of Fifth-Third Bank will give an economic update.
Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)
2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS
Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE
Date: October 25 – 27, 2013 | Times TBD
Additional Information: Please contact email@example.com for additional information.
DECODING HEALTHCARE SEMINAR
Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.
Speakers will include John Harding, President and CEO of Adventist Healthcare Systems, Stephen Klasko, Dean and President of USF Health College of Medicine, David Lewis, CEO of United Healthcare of Florida, Nancy Templin, CFO of All Children’s Hospital and a mystery speaker (other than Colonel Sanders) to be identified.
We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.
Date: Tuesday, October 29, 2013
Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida
Additional Information: For more information on this event please email firstname.lastname@example.org
NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR
Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW
Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)
Location: Seton Hall Law School, Newark, New Jersey
Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since. Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.
NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION
Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN
Date: Saturday, November 2, 2013
Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm
Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association. We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email email@example.com
SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE
Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT
Date: Thursday, November 7, 2013
Location: Hilton Downtown Salt Lake City, Utah
Additional Information: Please support this one day annual seminar conveniently located near skiing and tourism opportunities. If you would like to attend this event or receive the materials please email firstname.lastname@example.org
THE FLORIDA BAR – REPRESENTING THE PHYSICIAN
Date: Friday, January 17, 2013
Location: The Peabody Hotel, Orlando, Florida
Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.
This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.
A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally. Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed. Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.
1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW
Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.
Date: April 25, 2014
Location: Ave Maria School of Law, Naples, Florida
Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.
Additional Information: For more information on this event please contact email@example.com.
NOTABLE SEMINARS PRESENTED BY OTHERS:
MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.
On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes ecocentric living, social justice and personal development is providing a 3 hour workshop on Meditation. The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.
Date: Saturday, September 28, 2013 | 10am – 1pm
Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa
Additional Details: The cost for attending this workshop is $45 and you can register by clicking here. [LINK: http://www.thebridgetampa.org/compenent/registrationpro] or call 813-416-3069 for more information.
THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND
Date: September 27, 2013
Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut
Sponsor: Connecticut Bar Institute
Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children. For more information or to register please visit the Institute’s site here.
48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR
Date: January 13 – 17, 2014
Location: Orlando World Center Marriott, Orlando, Florida
Sponsor: University of Miami School of Law
Additional Information: For more information please click here.
16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR
Date: Wednesday, February 12, 2014
Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand
Sponsor: All Children’s Hospital
THE UNIVERSITY OF FLORIDA TAX INSTITUTE
Date: February 19 – 21, 2014
Location: Grand Hyatt, Tampa, Florida
Sponsor: UF Law alumni and UF Graduate Tax Program
Additional Information: Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach. The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues. Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics. UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”
Thank you to our law clerks that assisted us in preparing this report.